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Check figures: avoidable interest = 406,720 depreciation expense = 176,891

office and warehouse building for its own use at an estimated cost of $5,000,000 on January 1, 2020. Harrisburg $10.7 (102) (Capitalization of Interest) Harrisburg Furniture Company started construction of a combination expected to complete the building by December 31, 2020. Harrisburg has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually. $2,000,000 issued December 31, 2019 Short-term loan-10% interest, payable monthly, and 1,400,000 principal payable at maturity on May 30, 2021 Long-term loan-11% interest, payable on January 1 of 1,000,000 each year. Principal payable on January 1, 2024 Instructions (Carry all computations to two decimal places.) Assume that Harrisburg completed the office and warehouse building on December 31, 2020, as planned at a total cost of $5,200,000, and the weighted-average amount of accumulated expenditures was $3,600,000. Compute the avoidable interest on this project. b. Compute the depreciation expense for the year ended December 31, 2021. Harrisburg elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $300,000. 2. office and warehouse building for its own use at an estimated cost of $5,000,000 on January 1, 2020. Harrisburg $10.7 (102) (Capitalization of Interest) Harrisburg Furniture Company started construction of a combination expected to complete the building by December 31, 2020. Harrisburg has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually. $2,000,000 issued December 31, 2019 Short-term loan-10% interest, payable monthly, and 1,400,000 principal payable at maturity on May 30, 2021 Long-term loan-11% interest, payable on January 1 of 1,000,000 each year. Principal payable on January 1, 2024 Instructions (Carry all computations to two decimal places.) Assume that Harrisburg completed the office and warehouse building on December 31, 2020, as planned at a total cost of $5,200,000, and the weighted-average amount of accumulated expenditures was $3,600,000. Compute the avoidable interest on this project. b. Compute the depreciation expense for the year ended December 31, 2021. Harrisburg elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $300,000. 2